Million Dollar Monday
Million Dollar Monday
The Law of Reciprocity with Umberto P. Fedeli
When you help others achieve success, magic happens. “I’m a big believer of the law of reciprocity. You only get what you want to give,” explains Umberto P. Fedeli, President and CEO of The Fedeli Group, one of the largest privately-held risk management and insurance firms in the state of Ohio.
Chapter Summaries
- 01:01 - All About Umberto
- 02:18 - Dreams of Massive Success
- 04:35 - Cleaning Bathrooms
- 06:02 - Connecting the Dots
- 08:47 - Master Networking
- 13:39 - Passion for Investing
- 20:50 - Knights of the Holy Sepulchre
- 23:14 - Find Your Passion
Resource Links
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And then I would introduce other people to other people. And to me, networking is nothing more than the exchange of information, ideas, and resources. And so if you become a person that exchanges information, ideas, resources, and tries to put the other need of the person that you're talking to be it, the customer or friend, then what happens is...
Greg Muzzillo:Hello and welcome to Million Dollar Monday. I'm your host Greg Muzzillo bringing you real successful people with real useful advice for people with big dreams. I understand big dreams. I turned an investment of$200 and a lot of great advice from some really successful people into my big dream Proforma. That today is a half billion dollar company. Well, hello and welcome. I am really excited to introduce my guest for today. He is an entrepreneur, a business leader, a philanthropist, a master networker, a husband, a father of five, a grandfather of eight. He is the president CEO of The Fedeli Group, one of the largest risk management and insurance firms in the state of Ohio co-founder of an investment fund with over 300 million under management and absolutely one of the most respected leaders. I know serving on the board of the world, famous Cleveland Clinic and a leader and member of many other prestigious organizations, Umberto Fedeli. Thanks for joining me.
Umberto P. Fedeli:Great. Thank you. Thank you for having me.
Greg Muzzillo:So as you know, the purpose of Million Dollar Monday is to inspire people with big dreams and many times these big dreams start and the seeds of them start in our youth. So tell me a little bit just about your youth growing up. Uh, how did you get your work ethic? And then when did you start having big dreams of massive success.
Umberto P. Fedeli:Okay. Greg was, so I was born in the inner city of Cleveland in a neighborhood called Collinwood, which was an Italian neighborhood. We lived in a rented double. My mother and father were both immigrants from different parts of Italy. And my work ethic was probably learned by my dad and my relatives because they just worked. They worked very hard and they weren't very educated. My dad had a fifth grade education, my grandfather third, my grandmother's third one, my grandmother had zero. So they worked hard. They wanted to get ahead. So I think you learn it by example by the family, but we were full of love and it wasn't material wealth, but it was people who just loved people and they hugged and they kissed, and they cooked and they invited people over and they shared meals and they'd play cards and they would bake for each other. And there was a sense of community and loyalty, and they were very committed to their friends and their family. And I had great examples of my grandparents and our best friends growing up were our cousins. So we grew up as really a peasant kid and fortunate that I had the great example of my family, but fortunate to be educated in America. So I had kind of the best of both worlds, the old world and the new world.
Greg Muzzillo:Okay. So you have a great work ethic. Uh, when did you start having dreams of massive success in life?
Umberto P. Fedeli:Well, I think my first goal Greg was just to do my own thing. Uh, so I think I started off with just, I didn't fit kind of the corporate world. I didn't just feel like I wanted to go through traditional channels. So to me it was being able to do my own thing kind of my way, where I could create my own culture. Uh, so initially was if I could make a good living and do my own thing. And then I think as we had the little success, we wanted more and, uh, consistent with everything we do. If we're going to play, we played to win, and if we're going to work, we're going to work hard and if we're gonna achieve, we will achieve big. So something we talked about a little while ago, if you can't conceive it and you don't believe it, how can you actually achieve it? And so you have to have these ideas and goals, and then as you read other people's stories and you meet other people that are very successful, you learn from them and you might as well just go big, right? I mean, you might as well, try to be as successful as you can and become the best version of yourself.
Greg Muzzillo:Absolutely. Yeah. There's no doubt about it. When would you say you knew in your bones, um, you know, today there's a lot more talk and in schools about entrepreneurship, you and I grew up, we didn't even know how to spell those words, and so many more things about the law of attraction, a lot of that stuff, we didn't really know, but we lived and we didn't know it. When would you say you knew in your bones, you are going to be very successful?
Umberto P. Fedeli:Probably was probably around, uh, 18, 19 years old. Uh, I didn't like cleaning the bathrooms at a restaurant in my first real job and all the things that went along in the sanitation department. And then I was working construction. I didn't necessarily like the heavy lifting and the hard work outdoors, 12 to 15 hour days I was working with my father. Uh, then I decided I had to do my own thing. So I was probably 18, 19 years old, when I really decided that I was going to do something more entrepreneurial. Um, and I started in my business right around 19 and actually formed the partnership at 21 before I graduated from John Carroll.
Greg Muzzillo:Right, right. So let's talk about that now, you were at John Carroll. And, as I understand the story, you needed to make some money to work your way through college. You went to work for this insurance company, and somehow you went from working to this insurance company to partnering in the insurance company, to buying out, your boss and becoming boss, tell us that story.
Umberto P. Fedeli:Sure. It was a slightly different than that. Greg, what happened is I was, I was co-oping John Carroll and someone said, you should do this. And I was making a call and I happened to call on an insurance firm. And the gentleman asked me to go to dinner. So I thought he was interested in the products or services that we were trying to sell. And he said, why don't you spend a day with me? And why don't you come into our industry? And my perception of insurance was not good. I was thinking of a life insurance person that would come out of the home or the person that's standing behind a booth in a mall. He said, no business insurance, you would insure businesses. And I spent a day with them, uh, and really enjoyed it. And I worked with them for two years by going to school. And then I was offered a partnership with the gentlemen. So I left the gentleman I started with, but I gave him six months notice and I never competed against him. And because he taught me the business. And then I formed the partnership with the gentlemen when I was 21. And then I bought him out, when I was 27, 28 years old. And then we built our firm from there. Unfortunately, both, both gentlemen are gone today, but, I learned an awful lot from the first gentlemen Mr. Lewis. Uh, and I went to his funeral at 99. And when his daughter saw me, she started crying. He was very proud of our success, but also the foundation of what I learned from him in those two years was enormous.
Greg Muzzillo:Well, you learned that something you might not have even thought of as a career or a business, was maybe a great, great opportunity. And sometimes it's funny how I think when, uh, I tell people, you know, you need to have your antennas up. There's some people they say they want to own their own business, but their antennas aren't up. And I think sometimes opportunities come to us. But if our antennas aren't up, if we're not receiving them, if we're not listening to them, like your antenna was up. You thought why wouldn't I just go give this thing a try? And because you gave that a try, the whole insurance business, it shaped your life.
Umberto P. Fedeli:You're actually right because sometimes things are random. And when I started working with him, I really thought I was going to go into the food business because I was a compulsive eater and I loved being around food. And I just thought I would do this until I really found out what I really wanted to do. And all of a sudden I ended up doing it and not realizing it. And then we branched off to other areas. But one of the things I share with people today, I was so busy, uh, collecting dots, but I never necessarily always connected them. And I should have, if I go back and reflect, I had not, even if I paid attention, just everybody who came in and out of our home. And everybody came into our office for lunch. The opportunities that I missed that were right in front of my eyes, I didn't have to go to wall street. I didn't even have to go to the West coast. I didn't have to go to ninth street downtown
Greg Muzzillo:Talking about loving food. Uh, let's get to networking. You're a master networker. Uh, in fact, I was honored to be a guest at one, these double lunches that you had two lunches, um, loaded with people, networking every day with two lunches a day. As I remember, many times your mom would come in and even help do some of the cooking. Tell us how that idea came about. Tell us how it grew and tell us some successes from that networking.
Umberto P. Fedeli:So obviously a great question. I think what happened is I really believe you need to play to your strengths. And I always felt very comfortable around a table because that's how we grew up. You know, we'd be around a table and we would break bread. And I believe when you break bread, magic happens. And because we grew up having meals and sharing it with friends and share with family, uh, that's where I felt comfortable. And I'm a much better host than I am a guest. And when you can have people and you can break bread, you break barriers and it starts to happen as you share food. And the other opportunity I had Greg, without talking about it is I get to demonstrate servant leadership by serving our guests, by serving their meals, by picking up their dishes and by pouring water and wine and serving them food. And I get tremendous enjoyment out of that. And then we would introduce people to other people. And it wasn't often that I knew things. I just knew two things who you could trust and who really knew what they did. And then I would introduce other people to other people. And to me, networking is nothing more than the exchange information, ideas, and resources. And so if you become a person that exchanges information, ideas, and resources, and tries to put the other need of the person that you're talking be it the customer, be it a friend, then then what happens is people want to be around you because you're helping them achieve their success. You're helping them get a customer, helping them get a contract, helping them hire a new person, helping them with a major investment. And today we still up into the pandemic. We have these luncheons where we introduce people but we had one here last month. Uh, the gentleman's actually coming in from London tomorrow. We made an introduction in our dining rooms the last month or two, and a friend of mine, uh, has a SPAC that's got,$500 million in it. And, and then they're going to take this company public, which they think would probably be worth a couple billion dollars. And it all came from an introduction of breaking bread, in the office. And so it's helped charities. It's helped public officials. Uh, it's helped, uh, businesses. Uh, we had another situation where a friend of mine said, Hey, do you know anybody at this one company? And I said, well, a friend of mine did a lot of business there. So I called my friend, uh, and you probably knew him Jack Hill and had a company called Macco. And he said, well, listen, you and Tom Coughlin got the Ellis Island award. You sat next to him on Ellis Island called Tom. Tom was the president of this little company called Walmart. And, and so, uh, the next day we're on the phone with Tom and then six months later, Tom's at my house for dinner, uh, today. Uh, my friend and I happened to be on this board is doing, uh, let's say a hundreds of millions of dollars of business. And it all came from an introduction and it helped his business grow. Uh, and also when you help other people with their businesses or their health problems or personal issues, um, they want to keep you around. So I'm a big believer of the law of reciprocity. You only get what you want to give.
Greg Muzzillo:I love it. we're talking about the duct tape guy, right?
Umberto P. Fedeli:Yeah. Jack unfortunately is gone and he got to be very close to Mr. Walton, Sam Walton visited his office, but Jack and I met through a John Carroll connection. And I was a guest speaker at Jack's company, but Jack was friends with the former president. And, you know, he said, well, call him on his cell phone. And here we are getting advice for how you do business with this$600 billion company from the gentleman who was president of the company, giving my friend. And then he came to Cleveland and I said, why don't you come over for dinner? And I'll trattoria. And I had my friend over and he came over and I said, where are you staying? He goes I'm staying with my sister. I said, well, bring your sister over, but you don't mind. Why would I mind is your sister? And we had a beautiful meal in our Trattoria. And he gave him advice on how to do business. He actually recommended a consultant, which I helped bring him on board. And then, uh, the next board meeting, uh, they had their first eight figure order. And today they're doing tremendous, unfortunately Tom is gone, I'm sorry. Yeah. These are some great guys. And also these were super successful people who wanted so much to help other people be successful like you're doing right now, because what happens is you achieve a certain level of success and you're grateful, but then you say, you know, maybe it's time for me to help somebody else achieve it because only in this great country, can you have the opportunities that come from nowhere and really become successful beyond your wild imagination?
Greg Muzzillo:All right. So a very successful risk management insurance firm The Fedeli Group. And then at some point you got into, other investments, including this investment fund. And that, I think mostly deals with banks and financial institutions, but tell us about some of your other investments and some of those stories.
Umberto P. Fedeli:Sure. Uh, I didn't realize it, Greg, but over a period of 25 or 30 years, I had invested in about 130, 140 banks. And, and we were having some good results. I didn't necessarily know why, because I was investing way my mother cooks, uh, and she doesn't necessarily have an investment process or a cookbook or system. Okay. And so when we went back and we looked, we tried to figure out, okay, why did we have some success? We looked at what we did wrong. And we clearly knew that. And we looked at actually 450 of our picks over a dozen years and we studied it. And it was amazing how we do the same two or three things over and over again. And my biggest mistake was buying things that were value traps. They were inexpensive. And I thought they were a great buy, but certainly bring good or believing, uh, projections on things. Uh, 83% of mega mergers. Don't add value in a study we pulled out of Columbia with 2200 acquisitions. And so what happened is I approached a friend of mine. Who's a great man. He's a dear friend of mine and a partner named Marty Adams. Marty started in a little town with two little branches and a little town. He built it to about 18 billion of assets. 14 years ago, Marty sold the bank that he was running and built for 3.5 billion. And this was 14 years ago. So I don't know what it'd be in present value? probably at least double that I would say maybe more. And I said, Marty, listen, I have a simple concept. Why don't we formalize what we've been doing? I call you for advice. You l et me analyze i t. C ause he was an operator. And he really knew every aspect of banking as the operator. And I was the investor and I would approach another friend of mine. who was a kind of a bank analyst and knew how to analyze and tremendous details. And another friend of mine was a fund manager. And I said, let's put together a team and let's develop a process. And so we sent out a note to some people and I had two or three dining rooms full of people that came. And I had a gentleman who was a multi-billionaire. You're already doing this. What do you need us for? And I said, well, it's not that I need you. But number one is, I've never had a team. And now this gives me an opportunity to build a team that I couldn't necessarily hire today. They're already successful. I couldn't hire Greg today, but I could partner with you if I had an opportunity and we put a team of eight players together, and then I said, I never had a disciplined process. And we developed a disciplined process. And I said, also I have this Italian ego saying where I like to win. And I don't like to lose, I had this Catholic guilt where I don't want to let you down. Okay. So I figured if I got other people involved, it would put more pressure on me to perform. And rather than I start slowing down, I would sit there and say, I have other people, and it's harder to do things for other people sometimes than yourself. And i t's just like, when you can give a talk or public speaking and share what you're doing in your company, you really start learning what the secrets are of what works and why, or the factors. And so we created this little fund and we b uy community banks. U h, we buy smaller banks. U h, there used to be 17,000 banks in America. Canada has five, and now there's about 5,000 private banks, 500 public banks. Uh, but then we branched off. We also do what we call a durable growth. We buy these fast growing companies that have the ability to change they're they're disruptors. And so we look at companies and say, stay away from those being disrupted and try to buy the companies that are disrupting. So we are invested in a company called DocuSign that has taken off a company called Lavango. That's been up, I think seven, 800. We bought one that were up 15, 18 times. Uh, so we're buying companies that have factors and we studied the most successful companies in the world and found that existed. We came up with around 23 on our checklist. Then we buy great companies that are maybe the 50 best companies in the world when they're out of favor. And we take advantage of fear and uncertainty to create volatility and say, is it a real problems that a short-term problem? So we bought United Healthcare. One of the great insurance companies, right? When Bernie Sanders and Elizabeth Warren were talking about socialized medicine, you could have picked up TJ Maxx or, or bought Costco when Amazon announced they're buying whole foods, right? Uh, we bought, so we have companies like Google and Facebook and visa and United Healthcare. So those are great wide known companies. And then we buy income growth, capital appreciation, but then we also participate what I do, I call it co-investing and we're investors with some terrific companies. There's one here in Cleveland. I think best-in-class first-class and private equity. They have about 11 billion of assets and they buy smaller companies in Southern platforms. So there were just passive investors because they do things in Australia. We're not set up there. So we do private equity and real estate with two criteria. One with people that have super high integrity, because we don't care how smart you are. If you don't have good integrity, for sure. Two, we want somebody who has a proven track record in that niche. So in that case, we're just passive, on the public equities, we have our own team and we pick our own selections. And again, we run our business, but it also becomes a social thing because like normal people, my wife says I'm not normal. I don't like fishing. I wish I did. I don't like boating. I don't like golf. So, so investments has become kind of a hobby. And we study the greatest investors. We probably all 75 of the a hundred greatest investors. We read every book, we read studies and then we try to put it into action. And then we benchmark and people say, golf is golf is challenging. I said, well, you go out and compete against Warren buffet or you have to be against Dave Tepper or Stanley Druckenmiller or George Soros. Uh, and so to me, it's economics micro, macro it's understanding business, it's understanding human nature, politics people. So I find it fascinating because it's basically investments are two parts the economics parts. And then there's the human nature part.
Greg Muzzillo:Yeah. And it's fun for you or you wouldn't be doing it. It's your, like you said, it's your leisure activity and you're very successful.
Umberto P. Fedeli:It's, it's a lot of fun. And then we also track our results. And if we don't perform, if you got a better way of doing something, I'll invest alongside of you. But if we're doing better than I have to earn that right. To do it on my own, for sure. But I also know when I have had a little downtime, uh, you know, if you get sick, God forbid you end up with the virus. Uh, all of a sudden, uh, this idea of retiring, and like, I don't know what the hell to do, but I mean, watch TV or soap operas, or like all the things you're supposed to be able to do when you can do them. I don't want to do so. We're going to get there. I'm not going to retire.
Greg Muzzillo:We're going to get there. I know that you said, uh, a long time ago when you were named to the 40, under 40, um, that you'll retire when they put you in a box. I don't know if you remember saying that
Umberto P. Fedeli:It made my sister cry. I remember. Yeah.
Greg Muzzillo:Ah, too funny. All right. So along with being a, well-read, hobbyist investor, uh, dealing with hundreds of millions of dollars, maybe even billions, you're a respected leader serving, serving on the board of the world, famous Cleveland Clinic. I know congratulations or an order. You just won the pillar award for the philanthropist of the year. Congratulations. Thank you. And one of the awards though, I would love to talk about because I, I never heard of this award was the the Holy Sepulchre of Jerusalem. Tell us about that award. How did it come about what's it about?
Umberto P. Fedeli:Well, what it really is it's more of a knighthood of the Catholic church and we were very, uh, honored that, uh, the late great Saint John Paul, uh, had, um, comes from the Pope. Uh, it was recommended by our dear friend, Bishop Pilla, uh, who was 88. Um, and he was head of the national conference of bishops. So in effect, Bishop Pilla was in charge of the Catholic church in America representing 75 million Catholics. And so there's various knighthoods of the Catholic church. Uh, this is one that the church has built over where, uh, Christ was buried. And the purpose of this knighthood is to make sure there's a presence of Christianity in the Holy land. And, and so, uh, so this was something that we, you know, we accepted, uh, as a Catholic. Um, and, and, and at the time it was, uh, John Paul, who we had the opportunity to meet, who really broke down, communism, uh, without, one shed of blood, uh, and was an amazing man. And, and so in our lifetime, uh, we've had some people like John Paul or Mother Teresa that really made a big difference. And, but anyways, getting back to the night of the Holy Sepulchre, that that is more of a knighthood, they have variations, there's Saint Gregory, uh, and being Catholic is part of who I am like being Italian, being from Cleveland. Uh, there are just certain parts that are the fabric of who you are, and it's just part of who we are.
Greg Muzzillo:Yeah. Well, congratulations on all of your success. Congratulations on all of your recognition. Thank you so much for sharing your stories. One final question, because I know that you're a prolific writer. You write for some of the magazines in Cleveland, and you write very eloquently on success. Um, as we end our time together, what final pieces of advice would you have for entrepreneurs, and
Umberto P. Fedeli:People with big dreams? I think the advice I would share, uh, Greg is find out what you'd love to do, find out what you're passionate and find out what your strengths are, because when you play to your strengths and you do what you love to do, you just can't wait to do it. Uh, 50% of Americans are just in the wrong spot. And if you play to your strengths and you do what you love to do, then you just can't wait to do it because then you're never working. And then your competitors are competing against you and you are passionate. And somebody once said, you show me a super successful person and I'll show you a model mania on a mission. So I think It's figuring out your passion, your strengths, and what you love to do, and it's okay. Know your weaknesses, we all have them and work around the weaknesses, but really concentrate on your strengths and passion of what you're the best at what you love to do. And you'll do it a lot more successfully. Great advice Uberto. And thank you again for joining me. It's been an honor for me to have you as a guest on Million Dollar Monday, it's my honor, Greg. I appreciate what you're doing for so many. So thanks for having me.
